Sunday, January 27, 2008

Moderation in the market stress indicators continued this week, as total SIT losses, SIT market share, and SIT inventory all showed little change:

These trends are in stark contrast to the reports of acceleration in foreclosure activity during the fourth quarter of 2007. This, combined with the new, creative ways people are finding to try and offload their debt, I am becoming more convinced that these SIT indicator "improvements" are merely the result of folks giving up on the market altogether. Why keep paying on a house you have no hope of ever paying off?

There have been several good discussions this weekend on the sea change in borrower psychology that is taking place, and I encourage those who haven't already to check out both Mish and Calculated Risk:

As for this blog, I'm trying to find some good data to help me get ahead of this trend. Obviously, if the banks dump their REO onto the market, any spike in FIT listings would be coincident at best. Stay tuned.

5 comments
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9504 Sara Street sold on 12/19/07 for $220,000. The buyer got a $182,000 loan. The seller was US Bank, probably one of their MBS investor portfolio we all hear about, for which they are the trustee.

The house previously sold on 9/13/06 for $424,000. That price, for 1386 sf, was over $300/sf. Possibly a mortgage fraud, cash back deal. Never the less, the new price is almost a 50% decling, and it's not even '09. Now where have a heard that before....50% decline by 2009....PR?